News:

"There is a terrible desperation to the increasingly pathetic rationalizations from the climate denial camp. This comes as no surprise if you take the long view; every single undone paradigm in history has died kicking and screaming, and our current petroleum paradigm 🐉🦕🦖 is no different. The trick here is trying to figure out how we all make it to the new ⚡ paradigm without dying ☠️ right along with the old one, kicking, screaming or otherwise." - William Rivers Pitt

Wind & Solar Are Already Cheaper Than Coal & Gas, So Let’s Get On With It

May 28th, 2017 by Guest Contributor '

SNIPPET:

Originally published on RenewEconomy.By Sophie Vorrath

New wind and solar energy generation is already cheaper – on average – than the cost of existing coal or gas power on Australia’s National Electricity Market.

We’ve reported it, and Bloomberg New Energy Finance foreshadowed it at the recent Australian Solar Council Solar and Energy Storage conference in Melbourne (did we mention battery storage..?).

And this week, the CEO of the Australian Renewable Energy Agency delivered the news to the federal government’s Senate Environment and Communications Legislation Committee, with the moment captured on video.

India cancels plans for huge coal power station —because solar energy is getting so cheap

LAST UPDATED ON MAY 29TH, 2017 AT 9:36 PM BY MIHAI ANDREI

Good news from India, as authorities report the scrapping of plans for nearly 14 gigawatts of coal-fired power stations.Indian energy

India is the world’s second most populous country, and one of the fastest growing economies. Several projections put future India as the world’s most populous country and the world’s third largest economy by 2050, so if we are to truly combat global warming and achieve a sustainable future for the planet, India will be a key player.

Looking at India’s development over the past few decades has been quite a rollercoaster. With poverty running rampant through many parts of the country and a severe lack of infrastructure in the rural areas, it was surprising and inspiring to see the country’s ambitions in terms of renewable energy. In recent years, India has become one of the best markets for solar energy, with more and more panels being installed every day.

There are over 300 million people currently living in India with no access to electricity, most of which live in rugged, inaccessible areas. Establishing a conventional grid would be incredibly costly, but this is the beauty of solar power: it doesn’t really require a conventional grid. Aside from being renewable, clean, and cheap, solar can work with a local or separated grid.

Still, despite India investing massively in renewable energy (mostly solar), they’ve also developed a backup plan — also committing to fossil fuel energy, especially coal; pretty much the dirtiest source of energy. Last year, India announced plans to build more than 300 gigawatts (GW) of new coal capacity by 2030, even though that was found to be almost entirely unnecessary and wasteful, as over 90% of that new capacity would remain idle. Basically, the Indian government remained determined to not put all their eggs in one basket and invest both in renewable and fossil fuel energy.

Coal of the past

In 2017, things changed a bit. The Indian state of Gujarat announced the cancellation of a proposed 4 GW coal ultra-mega power project, citing a surplus of energy in the area and a desire to continue moving away from coal. That was just the start.

Now, in total, 13.7GW of planned coal power projects have been canceled this month alone, which is quite a figure.

Analyst Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA) said that tariffs have dropped so much in India that a tipping point has been reached: solar energy is now cheaper than coal.

“Measures taken by the Indian Government to improve energy efficiency coupled with ambitious renewable energy targets and the plummeting cost of solar has had an impact on existing as well as proposed coal fired power plants, rendering an increasing number as financially unviable.”

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“India’s solar tariffs have literally been free falling in recent months,” he added.It’s a positive prospect for India, which could trigger a chain reaction elsewhere in the world.

In Latest Sign of Crude Glut, Ageing Supertankers Used to Store Unsold Oil

June 16, 2017 by Reuters

ReutersBy Keith Wallis and Henning Gloystein SINGAPORE, June 16 (Reuters) – Traders are increasingly storing oil in ageing supertankers in Southeast Asia as they grapple with a supply overhang that has left the system clogged with unneeded fuel despite an OPEC-led drive to cut production to prop up prices.

Around 10 very large crude carriers (VLCCs), all between 16 and 20 years old, have been chartered since the end of May to store crude for periods ranging from 30 days to around six months, brokers told Reuters. Each VLCC can carry 2 million barrels of oil.

These vessels are in addition to around 30 supertankers used for long-term storage around Singapore and Linggi, off the West coast of peninsula Malaysia.

One of the main drivers for storing oil in tankers is that crude prices for immediate delivery are cheaper than for future sale, a market condition known as contango.

Brent crude futures, the international benchmark for oil prices, have fallen by 13 percent since late May, to around $47 per barrel. Brent for delivery at the end of 2017 is $1.5 per barrel more expensive.

“Floating storage does seem … viable assuming time charter rates of under $20,000 per day,” said Rachel Yew, oil and tanker market analyst at Oceanfreightexchange.

Current rates to charter a five-year-old 300,000 DWT for one year are $27,000 per day, according to shipping services firm Clarkson. Rates for VLCCs at least a decade-old are much cheaper.

“It makes a lot of sense for a trader to pay $16,000-$19,000 per day to take an older VLCC for 30-90 days to store oil,” said a Singapore-based supertanker broker, asking not to be identified.

The festering supply glut comes even as the Organization of the Petroleum Exporting Countries (OPEC) pushes to withhold production until the end of the first quarter of 2018.

A shortage of spare onshore storage in China, as well as an expectation that new Chinese crude import quotas for independent refineries will be announced soon, are also playing a role in putting crude into tanker storage in Southeast Asia.

“Once China’s quota are released, you want to have oil close to China. Because onshore storage there is pretty full, the next easiest location is around Singapore and Malaysia,” said one trader.

“This expectation of new Chinese orders also helps explain why future crude is more expensive than current crude. That’s why we store it for later sale,” he added.

Sweden’s largest pension fund, AP7, announced last week that it had divested all its investments in six separate companies that it says had violated the Paris Climate Agreement, including big name companies such as ExxonMobil, Gazprom, and TransCanada .

AP7 provides pensions to 3.5 million Swedish citizens, making it the country’s largest national pension fund. Last week, the group announced that it had divested itself from six companies it believed had violated the Paris Climate Agreement in different ways. Specifically, AP7 accused ExxonMobil, Westar, Southern Corp, and Entergy of fighting against climate legislation in the United States, Gazprom for exploring for oil in the Russian Arctic, and TransCanada for building large-scale pipelines across North America.

We should also bear in mind one other thing that can be less than obvious but may play a large role in the overall picture. It is that a small loss of revenue can sometimes produce large financial losses, putting profits into negative territory. In a stressed company, this can end in complete collapse.

Book Preview: The Tesla Revolution — Why Big Oil Has Lost The Energy War

SNIPPET:

June 23rd, 2017 by Guest Contributor

Originally published on EV Annex.By Charles Morris

Everybody seems to be piling on the poor oil barons these days. Just as Tony Seba’s latest paper nmpredicting the doom of the industry is making the rounds, a new book explains their predicament from an even more Tesla-centric perspective.

The Tesla Revolution: Why Big Oil Has Lost the Energy War is by Rembrandt Koppelaar, a Senior Researcher at the Swiss Institute for Integrated Economic Research, and Willem Middelkoop, founder of the Commodity Diversity Fund.

It examines the disruptive combination of electric vehicles and renewable energy, both fields in which our favorite California company is dominant. It’s a scholarly volume, with plenty of facts and figures, as the following brief excerpts will show (via GreenBiz).

Emmanuel Macron, the new president of France and not yet 40 years old, is taking the first steps toward his stated goal of advancing his country’s commitment to the Paris climate change accords. Nicholas Hulot, Macron’s Ecological Transitions minister, told the French press this week that his country will impose a moratorium on new oil and gas exploration licenses.

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“There will be no new exploration licenses for hydrocarbons, we will pass the law this autumn,” Hulot said.

Electricity investment overtakes oil, gas for first time ever in 2016: IEA

PARIS (Reuters) - Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said on Tuesday.

Total energy investment fell for the second straight year by 12 percent to $1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26 percent to $650 billion, down by over a quarter in 2016, and electricity generation slipped 5 percent.

"The reaction of the oil and gas industry to the prolonged period of low oil prices which was a period of harsh investment cuts; and technological progress which is reducing investment costs in both renewable power and in oil and gas," he said.

Oil and gas investment is expected to rebound modestly by 3 percent in 2017, driven by a 53 percent upswing in U.S. shale, and spending in Russia and the Middle East, the IEA said in a report.

"The rapid ramp up of U.S. shale activities has triggered an increase of U.S. shale costs of 16 percent in 2017 after having almost halved from 2014-16," the report said.

The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said.

"Robust investments in renewable energy and increased spending in electricity networks, made electricity the biggest area of capital investments," Varro said.

Electricity investment worldwide was $718 billion, lifted by higher spending in power grids which offset the fall in power generation investments.

"Investment in new renewables-based power capacity, at $297 billion, remained the largest area of electricity spending, despite falling back by 3 percent," the report said.

Although renewables investments was 3 percent lower than five years ago, capacity additions were 50 percent higher and expected output from this capacity about 35 percent higher, thanks to the fall in unit costs and technology improvements in solar PV and wind generation,the IEA said.

Investments in coal-fired electricity plants fell sharply. Sanctioning of new coal power plants fell to the lowest level in nearly 15 years, reflecting concerns about local air pollution, and emergence of overcapacity and competition from renewables, notably in China. Coal investments, however, grew in India.

"Coal investment is coming to an end. At the very least, it is coming to a pause," Varro said.

The IEA report said energy efficiency investments continued to expand in 2016, reaching $231 billion, with most of it going to the building sector globally.

Spending on electricity networks and storage continued the steady rise of the past five years, reaching an all-time high of $277 billion in 2016, with 30 percent of the expansion driven by China’s spending in its distribution system, the report said.

China led the world in energy investments with 21 percent of global total share, the report said, driven by low-carbon electricity supply and networks projects.

Although oil and gas investments fell in the United States in 2016, its total energy investments rose 16 percent on the back of spending in renewables projects, the IEA report said.

Agelbert NOTE: As you will learn, these floating drill rigs were previously cold stacked. That means they put them out of service HOPING to return them to service when oil prices "went up". Massive increases in Renewble Energy from both solar and wind has kept that from happening. The fact that these rigs will now be scrapped makes it crystal clear to an objective observer that Transocean fossil fuelers cannot figure out any way to make money out of them for the forseeable future (i.e. for at least 20 years - the average life of one of these floaters before scrapping). GOOD!

Transocean to Scrap Six Floaters from Fleet

September 22, 2017 by gCaptain

Sedco Express File photo

Transocean has announced its plan to scrap six deepwater and ultra-deepwater floating drilling rigs, aka “floaters”, as the offshore drilling company continues to shed older and less-competitive rigs from its fleet.

The floaters to be retired include the ultra-deepwater floaters GSF Jack Ryan, Sedco Energy, Sedco Express, Cajun Express, and Deepwater Pathfinder, and the deepwater floater Transocean Marianas. The rigs will be classified as held for sale and will be recycled in an environmentally responsible manner.

All six rigs were previously cold stacked.

Transocean says it will recognize an impairment charge of approximately $1.4 billion during the third quarter of 2017 as a result of the sale.

“We continue to enhance the quality of our fleet through the addition of new, high-specification assets, and the retirement of older, less competitive rigs,” said Jeremy Thigpen, President and Chief Executive Officer. “We remain committed to providing our customers with the most technically capable and highest quality ultra-deepwater and harsh environment assets in the industry, and will continue to objectively evaluate our rigs and high-grade our fleet as the market evolves.”

Following the retirement and sale of the six rigs, Transocean will own and operate a fleet of 38 mobile offshore drilling units consisting of 25 ultra-deepwater floaters, seven harsh environment floaters, two deepwater floaters and four midwater floaters.

The move by the world’s biggest offshore-rig operator signals just how bleak the future looks for deepwater drilling. Pathfinder is the most famous of six floating rigs the company is scrapping in burials that will add up to a bruising $1.4 billion write-off. Competitors are going the same route, jettisoning more rigs in the third quarter than have ever been trashed in a 90-day stretch, according to Heikkinen Energy Advisors analyst David Smith.

That’s how bad it is, with predictions crude prices won’t go much higher than $60 a barrel in the next year compared with around $50 recently. “Deepwater is going to be playing a much-reduced role on the global oil-supply stage relative to what the industry expected as recently as three years ago,” said Thomas Curran, an analyst at FBR Capital Markets in New York.

For all that, it could have been worse, in one way, for Transocean. It has been the most aggressive in an unprecedented experiment with what’s called cold-stacking for big drillships. After oil prices cratered in 2014, the company didn’t send all of its unwanted rigs out to sea in the time-honored temporary holding pattern where engines keep running and a crew remains on board — something know as warm stacking, naturally, that runs up a daily bill of some $40,000. Instead, Transocean dropped anchor on nine high-tech ships 12 miles off the coast of Trinidad & Tobago and simply shut the motors off. So far the savings are in the neighborhood of $90 million.

New Generation

This hadn’t been tried before with the new generation of finely tuned, computer-driven giants never intended for long-term parking. Equipped with derricks towering 220 feet above the platform and able to drill in 10,000 feet of water, the vessels had been in demand since birth. The big question was whether one could be shut down so solidly and later switched back on at a reliable cost. (Rival Ensco Plc brought its DS-4 drillship back from cold stack, but it wasn’t mothballed as long as Transocean’s rigs and was tied to a dock, allowing it access to more auxiliary power while parked.)

With Pathfinder, and a cousin called the GSF Jack Ryan that’s also being scrapped after its Caribbean cold stacking, Transocean will never know for sure. The Vernier, Switzerland-based company declined to comment for this story.

Lazard is a global asset management company that tracks the cost of producing electricity, among other things. It uses a measure called the Levelized Cost of Energy (LCOE), which averages the estimated costs of construction, maintenance, and fuel for electricity generating assets over the number of megawatt-hours that each is expected to produce over its lifetime. In simple terms, it is one way of comparing different ways of making electricity to see which cost more and which cost less.

By Sveinung Sleire (Bloomberg) — The $1 trillion fund that Norway has amassed pumping oil and gas over two decades wants out of energy stocks.

Norway, which relies on oil and gas for a fifth of economic output, would be less vulnerable to declining crude prices without investments in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.

“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy central banker overseeing the fund, said in an interview in Oslo. “We can do that better by not adding oil-price risk.”

The plan would entail the fund, which controls about 1.5 percent of global stocks, dumping as much as $40 billion of shares in international giants such as Exxon Mobil Corp. and Royal Dutch Shell Plc. The Finance Ministry said it will study the proposal and decide what to do in “fall of 2018” at the earliest.

By Mikael Holter (Bloomberg) — Can Norway dump $35 billion in oil and gas investments, and simultaneously convince that same industry to throw money into the country’s own fossil-fuel future?

After the initial shock of learning that Norway’s $1 trillion wealth fund wants nothing to do with it, the petroleum industry says both are in fact possible.

But the mood is shifting. While the fund said its proposal is about spreading risk and doesn’t imply a negative outlook on the oil industry, the plan reverberated as a nod from western Europe’s biggest oil producer to the uncertain future facing oil.

SNIPPET 2:

Confident Lobby

The proposal needs approval from Norway’s government and possibly even Parliament. Crucially, it has no bearing on the terms offered to oil companies operating offshore Norway, said both Industry Energy and the Norwegian Oil and Gas Association , a lobby group for companies such as Royal Dutch S , Total SA and Exxon Mobil Corp. — all companies that could be dropped by Norway’s wealth fund if the proposal is implemented.

When an electric energy pioneer like General Electric (NYSE: GE) reconfigures its entire energy business, investors should take note. That's exactly what happened last week when GE Power announced it would cut 12,000 jobs, or 18% of the division's workforce, reducing the company's exposure to traditional power plants.

What wasn't affected was GE's staffing or investments in renewable energy and energy storage. In fact, these emerging energy assets are what's disrupting fossil fuels more broadly. GE has made the first step to reducing exposure to fossil fuels -- now the question may be "What's next?"

Coal power plant with smoke coming from smoke stacks. (picture at link)

Coal power plants like this one are being shut down by the hundreds, forcing GE to cut back on its power plant business. Image source: Getty Images.

What GE's layoffs tell us

As part of a plan to cut $1 billion in structural costs at GE Power, there will be about 12,000 positions eliminated up and down the business. Weak fundamentals in the power plant business overall were the drivers of the move, with the press release saying:

Traditional power markets including gas and coal have softened. Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables. GE Power is right-sizing the business for these realities and is focused on improving operational excellence and reducing its footprint and structure, which will help drive significant improvements in cash flows and margins.

Notice that growth in renewables was given as a reason for the reduction in GE's power business. As wind and solar energy have come down in cost, they've replaced traditional coal and natural gas power plants as the fuel of choice for new power plants around the world.And there's no reason that's going to change. What's unclear is if GE is going to transition from the dying fossil fuel business to the growing renewable energy business.

Is GE taking renewables seriously?

If GE is hoping to play a meaningful role in renewable energy in the future it's going to have to take the industry more seriously. GE sold its thin-film solar business to First Solar (NASDAQ: FSLR) in 2013, largely exiting the solar market. In wind, GE is a market leader in turbines, but pricing pressure has compressed margins for the industry as a whole. Energy storage is the third leg of renewable energy disruption, and GE hasn't made a meaningful play in the industry so far, ceding market share to AES (NYSE: AES), Siemens, and Tesla (NASDAQ: TSLA).

The only segment where GE seems to have taken renewable energy seriously is financing. The company has financed $5 billion of projects over the last three years. But that level of investment isn't going to drive earnings for a $153 billion company.

To take renewable energy seriously, I think GE needs to start putting its balance sheet to work, scooping up assets and developing projects around the world. Buying First Solar or SunPower (NASDAQ: SPWR) would make sense, although SunPower is majority owned by Total (NYSE: TOT) today. With SunPower, in particular, it could invest in the manufacturing scale necessary to become profitable and increase market share to become a top-3 manufacturer.